Maitland/AMO Morning Monitor – 11 October 2018
The FTSE has opened down. The German DAX and the French CAC are have also both opened down.
In Asia, markets are lower today as a global sell-off in both equities and bonds were buoyed by concerns over the impact of increasing US interest rates.
In the news
- May's Brexit plan teetering following threat from DUP
- James Murdoch set to replace Elon Musk as chair of Tesla
- Decade of weak pay might be over
Top Financial Announcements* Maitland Client
Hargreaves Lansdown PLC Trading Statement
- Net revenue up 16% to £120.8m (2017: £104.1m).
- Assets under administration up 3% to of £94.1bn.
- Net new business of £1.3bn in the period.
- Chris Hill, CEO, said: “I’m pleased to report a solid start to our financial year for growth in clients, net new business and revenue. The past quarter has seen an uncertain market environment and weak investor sentiment resulting in an industry-wide slowdown in net retail flows. Despite this backdrop, we believe the strength of our business model positions us well for when sentiment improves.”
- Underlying EBITDA was up 30% to €466m.
- The company estimates that the impact of maintenance shuts on underlying EBITDA for 2018 will be around €115m (2017: €95m).
- Revenue up 7% to £96.4m.
- Market expectations for Adjusted EBITDA are in a range of £127.2m to £131.2m, with an average of £128.7m.
- The drivers of trading in the third quarter were insurance remained in growth despite a falling premium cycle, positive momentum in Money continued, switching rates in Energy remained strong against tough comparatives, and other Revenues includes £4.6m attributable to Decision Technologies.
- Mark Lewis, CEO, said: “Trading continues on track as we reinvent the business to help our customers save more money. Decision Tech is now on board with its B2B comparison expertise. Energy switching in our Home Services business was better than expected with customers taking advantage of great 18 month fixed deals to beat rising prices.”
- The company has received IRB accreditation from the PRA for both its Mortgage and SME/Corporate portfolios.
- IRB accreditation means the Group is now authorised to use its own internal risk models in determining credit Risk Weighted Assets (“RWAs”) and the application of those models delivers a significant reduction in the RWAs held for the two portfolios.
- David Duffy, CEO, said: “I am delighted the PRA has approved CYBG’s applications for IRB accreditation across our Mortgage and SME/Corporate portfolios in what is an incredibly important milestone for the Group. This achievement also means we have delivered, on schedule, one of the major targets we set ourselves back in 2016 as part of the Group’s three-year strategy. As a result, we are now well-positioned to compete even more effectively across the market.”
- APAC division will make a pre-tax loss of between £12m-£15m in the full year to 31 December 2018.
- As a consequence the Group is undertaking a strategic review of the affected business units and will update the market in due course with the outcome of the review.
- In all other respects, the Group’s trading results for the 2018 financial year remain in line with the Board’s expectations.
- FY18 profits of £243.4m at 9 October 2018.
- Net cash position of c.£80m.
- Alistair Cox, CEO, said: “We have made a good start to our financial year, delivering another record quarterly net fee performance. Against increasingly tough comparatives, net fees in our International businesses grew by 11%, including 10 all-time records.Looking ahead, while we are mindful of macroeconomic conditions, the outlook remains positive across our International markets.”
- Net outflows in the quarter of £0.8bn.
- AUM down to £47.7bn.
- Closing net cash of £45m (2017: £77m).
- Open sales outlets up 28% to 60 (2017: 47 outlets).
- Total forward order book up 40% at £900m (2017: £644m).
- Ian Sutcliffe, Group CEO, said: “We have enjoyed another year of strong growth, underpinned by our strategy of mixed tenure delivery. Both our Partnerships and Housebuilding divisions have performed very well on all financial measures, exceeding all of the medium-term targets we set out ahead of our IPO three years ago.“